COLUMBUS, Ohio (AP) — Big changes are ahead for nearly
1.8 million workers, retirees and family members covered by Ohio’s five
public pension funds.
State lawmakers cleared a package of bills
this week aimed at shoring up the systems’ finances and keeping them
solvent. The result is adjustments to benefits, premiums and eligibility
requirements, including in some cases the age and service levels at
which participants will be eligible to retire.
Allowances for
cost-of-living fluctuations and the way the salary average for
determining benefits is calculated are among other areas where
legislation makes adjustments.
Here’s a look at some of the basic changes to the rules and what those will mean for
participants.
OHIO POLICE AND FIRE PENSION FUND
Q: Will my contribution rate go up?
A:
Yes. The current rate of 10 percent will rise in July in each of the
next three years, to 10.75 percent, 11.5 percent, then 12.25 percent.
Q: Will my age of retirement change?
A:
Requirements for normal retirement remain the same for current active
members, which is at age 48 with 25 years of service. The new law would
affect members hired after July 1, 2013. At that point, the requirement
is age 52 with 25 years of service. Reduced benefits would still be
available at age 48 with 25 years of service.
Q: How will benefit payments change?
A:
The cost of living adjustments on pension benefits will change. The
amount of the adjustment will change when active members with less than
15 years of service as of July 1, 2013, retire. Instead of 3 percent of
their base pension amount, it will be the lesser of 3 percent or the
Consumer Price Index. For current retirees and active members with 15
years or more of service, the adjustment remains 3 percent. Also,
cost-of-living adjustments for all members will be delayed until age 55,
except for survivors and those who receive permanent and total
disability benefits.
Q: Will there be changes to how my benefits are calculated?
A:
Yes. For those with less than 15 years of service on July 2, 2013, the
average annual salary on which benefits are based will come from the
average of the highest five years rather than the average of the highest
three.
SCHOOL EMPLOYEES RETIREMENT SYSTEM
Q: Will my contribution rate go up?
A: No.
Q: Will my age of retirement change?
A:
Eligibility requirements don’t change for those who have 25 years of
service on or before Aug. 1, 2017. For everyone else who retires after
Aug. 1, 2017, eligibility for full benefits changes to age 67 with 10
years or age 57 with 30 years. Eligibility for early retirement changes
to age 62 with 10 years or age 60 with 25 years.
Q: How will benefit payments change?
A: Early retirees will receive reduced benefits. For those with 25 or more years of
service, minimum guarantees are in place.
Q: Will there be changes to the way my benefit level is determined?
A: No.
STATE TEACHERS RETIREMENT SYSTEM
Q: Will my contribution rate go up?
A:
Yes. The current rate of 10 percent will rise to 11 percent on July 1;
to 12 percent on July 1, 2014; to 13 percent on July 1, 2015; and to 14
percent on July 1, 2016.
Q: Will my age of retirement change?
A:
Eligibility remains the same for those who are 65 or older with five
years of service. The years of service required to retire earlier than
that will rise from the current 30 years beginning Aug. 1, 2015, to 31
years until Aug. 1, 2017; to 32 years until Aug. 1, 2019; to 33 years
until Aug. 1, 2021; to 34 years until Aug. 1, 2023; to 35 years until
Aug. 1, 2026. From then on, 35 years of service and age 60 will be
required to receive full benefits. A similar phase-in will take place
for reduced benefits.
Q: How will benefit payments change?
A:
There will be no change for those who retire before Aug. 1, 2015, or
meet current eligibility requirements before July 1, 2015. All others
will receive 2.2 percent of their final average salary for each year of
service, including years above 30 that yield more under the current
system. Cost-of-living adjustments will be frozen for current retirees
for one year in July, and resume at a lower rate. Those retiring Aug. 1
or later will see adjustments deferred for five years.
Q: Are there changes to the way my benefit level will be determined?
A:
Yes. After Aug. 1, 2015, the salary average used to calculate benefits
will be based on your five highest years of compensation rather than
your highest three.
PUBLIC EMPLOYEES RETIREMENT SYSTEM
Q: Will my contribution rate go up?
A: No.
Q: Will my age of retirement change?
A:
Members who are eligible to retire within 10 years or have 20 years’
experience will see service requirements increase: up from the current
30 years of service to 32 for all ages, 31 years at age 52, and five
years at age 66 now, rather than age 65. All other members can retire
with full benefits at 55 with 32 years of service credit, or at 67 with 5
years’ service credit. Different rules apply for law enforcement, where
48 will remain the minimum retirement age for those retiring in the
next five years, with age 50 or age 52 becoming the new minimum for
other groups.
Q: How will benefit payments change?
A: Those
set to retire within the next five to 10 years will see no changes.
Others will receive 2.2 percent of their final average salary for each
year of service up to 35, rather than the current 30 years. After 35
years, the higher percentage of 2.5 percent kicks in. Public safety
employees will see no change in benefits.
Q: How is health care coverage affected?
A:
The bill eliminates automatic eligibility for health care coverage
after 10 years of service, and leaves terms up to the PERS board.
Q: Are there changes to the way my benefit level will be determined?
A:
For those eligible to retire within the next 10 years or have at least
20 years of service, no. For others, the salary average on which
benefits are calculated will be based on the highest five years of
salaries rather than the highest three.
STATE HIGHWAY PATROL RETIREMENT SYSTEM
Q: Will my contributions rise?
A: The bill gives the retirement system’s board the authority to raise rates from 10
percent of a member’s salary to 14 percent.
Q: Will my benefits change?
A: No.
Q: Will my age of retirement change?
A: No.
Q: Will the way my benefits are calculated change?
A:
Yes. Beginning Jan. 1, 2015, the salary average on which benefits are
calculated will be based on the highest five years of salaries rather
than the highest three.
___
Online:
OP&FPF: http://www.op-f.org
PERS: http://www.opers.org

STRS: http://www.strsoh.org

SERS: http://ohsers.org
OHPRS: http://www.ohprs.org

Copyright 2012 The Associated Press.